Jim Keegan was studying at Chico State when the crushing 1976-77 drought spread across California. "My father had been building his [beef] herd for a long time," Keegan recalled. "But he had to sell it all."

That drought is remembered as the worst two years for lack of rainfall in California's recorded weather history. But it's a memory that may fade as the Golden State's most recent drought enters its third year. Experts say 2013 was the driest year on record for much of the state.

The year was highly discouraging for Keegan Ranch, located in the picturesque Bear Valley, ...